The Supreme Court has confirmed that local authority landlords must pay close attention when evicting secure tenants to avoid potentially large damages claims, even where the landlord has no intention of realising a financial gain from seeking vacant possession of the property.
A secure tenant left his property for Ghana for five months. The tenant had continued paying his rent, but had failed, in breach of his tenancy agreement, to notify the local authority of his extended absence. The local authority believed that he had died and so effected forcible entry to the flat and re-let it.
The issue before the Supreme Court was to identify the measure of damages available to the tenant for his unlawful eviction. The measure of damages payable for the unlawful eviction of a secure tenant is calculated by reference to the difference in value between the landlord’s interest in the building, assuming the occupier retained their secure tenancy, and the value of the interest on the assumption that they did not. This is determined immediately before the occupier ceased to occupy the premises. The court was not persuaded by the Local Authority’s argument that on an actual sale, the secure tenant would, in all liklihood, lose his secure tenancy, meaning the Local Authority would not have realised a notional profit from the sale.
The court concluded that the correct construction of the legislation resulted, in this instance, in the secure tenant receiving damages 12 times greater than his actual loss. The court doubted in these circumstances that it was right that the law should require payment out of public funds, but nevertheless held that, untill parliament intervened, they were bound by the legislation.
The case represents a stern reminder to local authority landlords to exercise care in seeking possession of properties occupied by secure tenants. In such circumstances the tenant may be entitled to punitive damages based on the landlord’s hypothetical gain, rather than any actual or intended gain.